German companies eye increased investment in Chinese market

A significant majority of German companies plan to maintain their operations in China, with many intending to increase investment within the next two years, according to a survey released by the German Chamber of Commerce in China on Wednesday.

The Business Confidence Survey Report for 2024/25, conducted between Sept. 3 and Oct. 8, gathered insights from 546 member companies, providing a comprehensive snapshot of the German business community's outlook in China.

The survey revealed that 92 percent of German firms intend to continue their operations in the country, with only 0.4 percent considering an exit, despite market challenges.

Notably, 51 percent of respondents plan to boost their investment in the next two years, and 87 percent of them cite the need to remain competitive as their primary motivation. These companies are increasingly adopting an approach of being in China for China, and being in China for the world.

Clas Neumann, chairperson of the board of the German Chamber of Commerce in east China, highlighted the importance of localization, noting that "German companies are addressing current market challenges and mitigating risks while positioning themselves to take advantage of the opportunities at hand."

The survey also revealed growing recognition of Chinese firms as innovation leaders. Though just 8 percent of respondents believe this is already the case, 55 percent expect it to become a reality within five years.

When ranking business opportunities in China, the internationalization of Chinese companies and the development of the green economy emerged as the top priorities for German businesses.

More than 5,000 German enterprises have taken root in China, and the Chinese market is of great significance to them, said Maximilian Butek, chief representative of the Delegation of German Industry and Commerce Shanghai.

A report from the German Economic Institute shows that the total direct investment made by German companies in China reached a record high of 11.9 billion euros (about 12.49 billion U.S. dollars) in 2023, a year-on-year increase of 4.3 percent. The figure accounted for over 10 percent of Germany's total overseas investment that year -- the highest level since 2014.

Oliver Oehms, executive director and board member of the German Chamber of Commerce in China (north China), expressed optimism about the Chinese market in an interview with Xinhua.

Noting that the German business community is always optimistic, he said, "Although the consumer confidence is relatively low right now, this can change very quickly. We need to remain confident."